Trivium China Podcast | I Say Overcapacity, You Say Involution, Let’s Call the Whole Thing Off

In mid-2024, Beijing rebranded its overcapacity problems as “involution.” Does it matter? As the bard would say, a rose by any other name…

And yet, over time, it’s become clear that this was more than just a rebranding exercise. Along with the change in name came a subtle shift in how Beijing perceives its overcapacity problems — a shift that has important policy implications.

In this podcast, Trivium Co-founder Andrew Polk and Dinny McMahon, Head of Markets Research, talk all things involution. The gents discuss:

• How the concept of involution differs from that of overcapacity

• Why Beijing doesn’t think overcapacity can exist in a global free market

• What Beijing’s anti-involution efforts look like

• And what it all means for the rest of the world

Then, Andrew wraps things up with a brief rundown of the most recent developments in the US-China trade truce.

Transcript:

Andrew Polk:

Hi, everybody, and welcome to the latest Trivium China Podcast, a proud member of the Sinica Podcast Network. I’m your host, Trivium Co-Founder Andrew Polk, and I’m joined today, once again, by our Head of Markets Research, Dinny McMahon. Dinny, how are you doing, man?

Dinny McMahon:

I’m doing good, mate. Good to see you.

Andrew:

Yeah. Always great to have you on. Missed you after taking the week off for Thanksgiving. So, it’s good to be back in the saddle here. It’s been kind of quiet on the news flow really out of China, I would say in terms of macro stuff. I mean, certainly things are happening. There’s a new update for DeepSeek that we’ll get into at some point. It sort of has implications for its competitiveness with the leading U.S. AI models. So, there is stuff happening in China. But today we wanted to dig a little bit deeper into a specific macroeconomic topic, which is to talk about why Beijing uses the term involution instead of overcapacity, and what that means, and how their efforts to address involution have been evolving in recent weeks, and kind of what it will mean for the economy going into 2026 and beyond.

And then we will touch briefly, of course, on the latest developments on the ongoing U.S.-China trade truce. We’ve seen a couple of positive developments on that side over the past couple of weeks. So, we’ll keep this one a little bit shorter today for listeners. We’ve been doing longer ...